The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.
The proposal is part of a sweeping blueprint to overhaul the nation’s hodgepodge of financial regulatory agencies, which many experts say failed to recognize rampant excesses in mortgage lending until after they set off what is now the worst financial calamity in decades.
Democratic lawmakers are all but certain to say the proposal does not go far enough in restricting the kinds of practices that caused the financial crisis. Many of the proposals, like those that would consolidate regulatory agencies, have nothing to do with the turmoil in financial markets. And some of the proposals could actually reduce regulation.
According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.
The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings.
The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.
And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security… [emphasis added]
Inserted from <NY Times>
The Fed is nothing more than a bankers’ club, whose interest is the profit of the financial institutions, not the well being of US taxpayers, as of course this coincides with the interests of the GOP. Brenecke will be holding a closed briefing in the House on Tuesday for GOP Representatives only, so he can fill them in on Reich’s real intentions and give them talking points to hide those intentions from the public. Meanwhile the rich are fleeing the US economy to preserve their wealth.
Where are investors putting their money in these uncertain times? Apparently, more and more are seeking safer havens in Europe, India, China and Latin America.
With recession fears dogging the U.S. markets, stocks had a dismal first quarter. But according to recent figures from two key research firms that track the mutual fund industry, investors are flocking to overseas markets.
Fund tracker TrimTabs Investment Research reported in its latest weekly report about market liquidity that total inflows into equity mutual funds during the week ended March 26 was $7.43 billion.
But of that total, $4.4 billion, or nearly 60%, was invested in funds that mainly invest in non-U.S. stocks.
What’s more, the latest TrimTabs data showed that investors pulled $6.9 billion from exchange-traded funds (ETFs) that invest in U.S. stocks… [emphasis added]
Inserted from <CNN Money>
Just as in 1929, the rich are taking advantage of inside knowledge and getting out leaving the middle class to go down with the ship. And speaking of rats deserting sinking ships, here’s what one of the very biggest rats is doing.
Wouldn’t you like to know where Dick Cheney puts his money? Then you’d know whether his “deficits don’t matter” claim is just baloney or not.
Well, as it turns out, Kiplinger Magazine ran an article based on Cheney’s financial disclosure statement and, sure enough, found out that the VP is lying to the American people for the umpteenth time. Deficits do matter and Cheney has invested his money accordingly.
The article is called “Cheney’s betting on bad news” and provides an account of where Cheney has socked away more than $25 million. While the figures may be estimates, the investments are not. According to Tom Blackburn of the Palm Beach Post, Cheney has invested heavily in “a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation protected securities fund. The first two hold up if interest rates rise with inflation. The third is protected against inflation.”
Cheney has dumped another (estimated) $10 to $25 million in a European bond fund which tells us that he is counting on a steadily weakening dollar. So, while working class Americans are loosing ground to inflation and rising energy costs, Darth Cheney will be enhancing his wealth in “Old Europe”. As Blackburn sagely notes, “Not all ‘bad news’ is bad for everybody.”
This should put to rest once and for all the foolish notion that the “Bush Economic Plan” is anything more than a scam aimed at looting the public till. The whole deal is intended to shift the nation’s wealth from one class to another. It’s also clear that Bush-Cheney couldn’t have carried this off without the tacit approval of the thieves at the Federal Reserve who engineered the low-interest rate boondoggle to put the American people to sleep while they picked their pockets.
Reasonable people can dispute that Bush is “intentionally” skewering the dollar with his lavish tax cuts, but how does that explain Cheney’s portfolio?
It doesn’t. And, one thing we can say with metaphysical certainty is that the miserly Cheney would never plunk his money into an investment that wasn’t a sure thing. If Cheney is counting on the dollar tanking and interest rates going up, then, by Gawd, that’s what’ll happen… [emphasis added]
Inserted from <Information Clearinghouse>
There you have it my friends, the foxes in the henhouse are running wild and taking every last penny they can under the auspices of No Millionaire Left Behind, leaving the rest of us holding the bag. The GOP is committing class warfare against the middle class and the poor.
Meanwhile, McConJob says the way out of the current crisis is less regulation.
Cross-posted from Politics Plus